RE:Currrent BoardI originally thought that Joe Hunnisett would be very valuable to Nordex's board. He seemed to have the right experience with being CEO at ETI and a chartered accountant etc. but I am beginning to have doubts about him too.
See the info from Bloomberg below,
"Mr. Joseph Hunnisett, Joe served as the President and Chief Executive Officer of ETI Holding Corp. (a/k/a, ETI Canada, Inc.). Mr. Hunnisett is a Chartered Accountant and has worked with Clarkson Gordon (now Ernst & Young). He has worked with several large manufacturing and distribution companies in a variety of senior financial and executive positions including Corporate Controller, Director of Manufacturing, Chief Financial Officer, President and Chief Executive Officer. In 1992, he joined ETI Explosives (a former Dupont Company) and served for 9 years as President & Chief Executive Officer. He also served on the ETI Board of Directors from 2000 to 2006. In 2006, he founded Ercott Capital Inc. and has served as its President and Chief Executive Officer since incorporation. He has been a Director of Nordex Explosives Ltd. since June 14, 2012. Mr. Hunnisett is a graduate of Laurentian University, Sudbury, Ontario in 1981 with an Honours Bachelor of Commerce Degree."
Also please notice the value Bloomberg ascribes to his 100,000 options, | Total Value of Options | C$34,582 |
In 2012 600,000 options were issued at $0.45
Black Sholes at $0.35 would give a total value of $210,000.
In 2011 the previous board issued 350,000 directors's options priced at $0.60 when the stock was priced at $0.38.
Black Scholes at $0.24 gave a total value of $84,000.
Due to the 'change out' of the board a portion of the 2011 options were cancelled which immediately increased earnings by $54,367. During the same time period the board with Hunniset and O'Reilly leading the charge expensed only $24,659 for all of the new 600,000 options granted.
Here is the ethical problem, there are now more share options issued for a significantly smaller price yet the charge against earnings has decreased rather than increased and there was absolutely no explanation as to what effect there would be if exactly the same accounting was used for both years.
The pair never mentioned that they had changed the method by which they expensed options. If they had expensed them in their entirety as the previous board had instead of a $24,659 charge the amount would have been $210,000. With an weighted average shares outstanding of 10,558,738 earnings per share would have dropped by 1.755 cents.
Instead of reporting 5 cents they would have only reported 3 cents. That is a big difference!
It would be enough to make some investors angry.
In the first quarter statement this same pair has now entered that there are 1.1 million options outstanding with a weighted average exercise price of $0.25. I pose the question, Is this accidental on their part or part of a larger scheme? So far there has been no retraction.
Are they changing the goal posts again? Last year the stock option plan was not approved by shareholders at the annual meeting, yet the company has gone ahead and begun issuing new options without this shareholder approval. As far as I know all share option plans must be approved by shareholders first before disbursements or they could possibly be disbursed conditional upon approval by sharehoders at the next annual meeting.
I keep hoping that Fabrice Taylor will intervene with his choices in a meaningful way. There definitely should be a changeout of several of these directors.
B&D